News Room - Steel Industry

Posted on 11 Feb 2015

Korean steelmakers expected to suffer amid record-high exports from China

Steelmakers in Korea are in for a tough year, especially with growing shipments from China in a market already suffering from an oversupply.

China, the world’s largest steelmaker exported 10.3 million tons of steel products in January, up more than 50 percent from a year ago.

The gain comes despite a new tax rule in China that was expected to curb the country’s steel shipments this year.

China ditched a tax rebate of nine to 13 percent on steel products that contain boron — a chemical added to steel products to increase quality.

Many Chinese steelmakers had taken advantage of the tax rebate system, enjoying a return equivalent to roughly 30 to 40 U.S. dollars for every ton of steel exported.
But with no signs of the supply glut dwindling, analysts in Korea say the country’s steelmakers have a rough year ahead of them.

(Korean, )
“Chinese steelmakers have turned to other chemical products that are still subject to the tax rebate, and due to China’s oversupply of steel products, exports will remain robust. Falling prices will also add to Korean steelmakers’ woes.”

Experts say Korean companies need to focus on lowering their prices in order to gain a stronger foothold in the market.

Korea shipped just under 370-thousand tons of steel to China last month, down more than eight percent from a year earlier.

In the same period, Korea’s imports of Chinese steel rose about one percent.